Scenario × Asset Analysis

What Happens to TIPS (TIP) When the Sahm Rule Exceeds 1.0?

The Sahm Rule triggers recession alerts when unemployment rises 0.5 points. What happens when it exceeds 1.0, signaling a deepening downturn?

TIPS (TIP)

$111.53

as of Apr 14, 2026

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Trigger: Sahm Rule Recession Indicator

0.20%

Condition: exceeds 1.0

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How TIPS (TIP) Responds

When the Sahm Rule Exceeds 1.0, TIPS (TIP) typically benefits from flight-to-quality flows. iShares TIPS Bond ETF, inflation-protected Treasuries. This scenario is particularly relevant for bonds & duration because changes in Sahm Rule Recession Indicator directly influence the macro environment for TIPS (TIP). Investors should monitor both the trigger condition and TIPS (TIP)'s response to position accordingly.

Scenario Background

The Sahm Rule identifies recessions in real time: when the three-month moving average of unemployment rises 0.5 percentage points or more from its 12-month low, the economy is already in recession. A Sahm value exceeding 1.0 indicates a severe acceleration in unemployment, historically signaling not just recession onset but a deepening downturn.

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Historical Context

The Sahm Rule has accurately identified every recession since 1970 with no false positives at the 0.5 threshold. Values exceeding 1.0 occurred in every recession from 1970 onward: 1974 (2.0 peak), 1980 (2.0), 1981-1982 (2.5), 1990 (1.8), 2001 (1.3), 2008-2009 (4.5), and 2020 (11.0 peak during COVID). The 1981-1982 recession showed Sahm reach 1.0 in July 1981 with unemployment at 7.2%, peaking at 10.8% in November 1982. The 2008 Sahm crossed 1.0 in October 2008 with unemployment at 6.5%; unemploy...